Pub baron Arthur Laundy and the co-owners of The Steyne hotel in Manly will pay tens of thousands of dollars in extra licence fees after a "strike" was imposed on the venue for serving alcohol to underage girls.
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In a judgement handed down in the District Court on Monday, The Steyne was also hit with $5700 in fines for allowing minors on the premises and permitting them to be sold or supplied with alcohol.
The decision comes just days before the state government is expected to announce its response to a statutory review of the so-called three-strikes laws by former High Court judge Ian Callinan.
Under the laws, pubs can lose their licence if they incur three strikes for serious offences under the Liquor Act.
The NSW branch of the Australian Hotels Association has been lobbying the government to change the law so that a strike is imposed on a licensee, not a hotel, as is the case with registered clubs.
The industry says a strike can cause banks to revalue a pub and seek more equity from the owner and make it harder to sell.
A spokesman for Liquor and Gaming NSW said the conviction would result in an automatic first strike under the three-strikes scheme.
As a consequence, the pub is set to pay a "compliance risk loading" of $3000 a year and a "patron capacity loading" of $8000 a year during the three years the strike is in place.
Mr Laundy told Fairfax Media: "I'm so shattered, I'm so disappointed. You try hard and one blemish in eight years and this is the result."
While Mr Laundy declined to comment further he has previously said he has never condoned underage drinking and had "cleaned up" the Steyne after buying it in 2010 with associates.
Police caught four 17-year-old girls drinking at The Steyne last year but a local court magistrate decided to not record a conviction against its then licensee, Stephen O'Sullivan, who was given a good behaviour bond.
The decision not to record a conviction meant no "strike" was recorded against the hotel, but the Director of Public Prosecutions successfully appealed the decision on Monday.
Last month Fairfax Media revealed that lawyers for Mr Laundy had tendered to the District Court a confidential excerpt from Mr Callinan's review of the three strikes law, which has yet to be tabled in parliament.
The extract – a case study of The Steyne – was given to the NSW branch of the Australian Hotels Association by counsel assisting the review, Jonathan Horton, QC, after a formal application and handed to Mr Laundy.
